Skyes and Skyes (Child support)
[2023] AATA 2148
•29 June 2023
Skyes and Skyes (Child support) [2023] AATA 2148 (29 June 2023)
DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2022/BC025246
APPLICANT: Mr Skyes
OTHER PARTIES: Child Support Registrar
Ms Skyes
TRIBUNAL:Senior Member S Trotter
DECISION DATE: 29 June 2023
DECISION:
The decision under review is varied so that for the period 1 July 2022 to 31 December 2025, the annual rate of child suport payable by Mr Skyes is increased by $1,000.
CATCHWORDS
CHILD SUPPORT – departure determination – school fees for child – ground for departure established – decision under review varied
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.
REASONS FOR DECISION
BACKGROUND
Mr Skyes and Ms Skyes are the parents of [Child 1] (born 2006), [Child 2] (born 2008) and [Child 3] (born 2011) (the children). A child support case was registered with Services Australia – Child Support (Child Support) in relation to the children on 16 July 2014. The children are currently recorded as being in the 100% care of Ms Skyes.
The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ child support incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment (commonly termed a change of assessment) in certain circumstances. Departure determinations can include varying components of the child support formula such as a parent’s child support income (which incorporates a parent’s adjusted taxable income) or varying the annual rate of child support.
Notably, a previous departure determination was made following an August 2020 application by Ms Skyes. Ultimately by decision of this Tribunal (differently constituted) of 26 October 2021, a departure determination was made increasing the child support liability payable by Mr Skyes by $2,500 per annum for the period 1 January 2021 to 30 June 2022. In making that decision, it was determined that as the costs of maintaining the children were significantly affected on account of private school fees for [Child 2] for private education as expected by the parents and on account of costs for [Child 3] and [Child 2] for essential orthodontic treatment, that Mr Skyes contribute to the orthodontic costs but that he did not have capacity to also contribute to the cost of [Child 2]’s school fees.
A subsequent change of assessment application was lodged by Ms Skyes on 9 May 2022 seeking a seeking a change to the administrative assessment of child support from 30 June 2022 on account of [Child 2]’s private school fees.
On 20 August 2022, Child Support decided that a reason had been established to depart from the administrative assessment of child support on the basis that the costs of maintaining the children are significantly affected because of the costs of caring for, educating or training the child in the way both parents expected and:
(a)increased the annual rate of child support payable by Mr Skyes by $1,365 for the period 1 July 2022 to 31 December 2022; and
(b)increased the annual rate of child support payable by Mr Skyes by $2,488 for the period 1 January 2023 to 31 December 2023.
This decision created $168.17 child support arrears payable by Mr Skyes and meant that his ongoing child support liability, based upon then adjusted taxable incomes and recorded care percentages for the children, increased from $7,623 per annum to $8,988 per annum.
Mr Skyes objected to this decision and, on 25 November 2022, a Child Support objections officer disallowed the objection.
Mr Skyes applied to the Tribunal on 12 December 2022 seeking independent review of Child Support’s decision stating as follows:
Applicant said his ex said she was applying for a scholarship for the child and so he signed the form but it was an actual enrolment contract. He never agreed to that school and he cannot afford the fees. He has subsequently taken his name off the contract but the issue of private schooling has been dragging on for years. The other children did not go to a private school and he thinks it is unfair that the daughter does. All because his ex defrauded him.
At a directions hearing on 9 May 2023, procedural directions were made in relation to the conduct of the matter and the provision of further documents from the parties.
The hearing took place on 19 June 2023. Mr Skyes and Ms Skyes both participated in the hearing by conference telephone and gave evidence on affirmation at the hearing.
11. The Child Support Registrar did not seek leave to participate in the hearing and did not attend but provided relevant documents from the Child Support file.
In considering the application, the Tribunal took into account the sworn oral evidence and submissions of Mr Skyes and Ms Skyes and the following documents:
(a)the documentary material provided by Child Support (Exhibit 1, pages 1 to 426);
(b)documents and written submissions received from Mr Skyes prior to and after the hearing (Exhibit A, pages A1 to 23); and
(c)documents and written submissions received from Ms Skyes prior to and after the hearing (Exhibit B, pages B1 to 61).
Copies of the documents (including numbered copied) were provided to each parent by Child Support or the Tribunal. However, Mr Skyes indicated at hearing that he had not received a copy of Exhibit B (although he had received a numbered copy of Exhibit A which was sent to him from the Tribunal in the same email as Exhibit B). The Tribunal discussed with Mr Skyes that it proposed to proceed with the hearing and would read out any relevant parts of the documents in Exhibit B to him and would arrange for the Tribunal Registry to contact him after the hearing regarding these documents, and that if he wished to comment further on any of the documents in Exhibit B he could write to the Tribunal providing any comment. The Tribunal proceeded with the hearing on that basis. The Tribunal has subsequently confirmed that an email was sent to all parties on 6 June 2023 attaching both the Exhibit A and Exhibit B documents. The Tribunal is satisfied that both Mr Skyes and Ms Skyes have had an opportunity to present his or her case having regard to the documents before the Tribunal and that they have each had an opportunity make submissions in relation to the documents before the Tribunal. No further submissions have been received as the date of the Tribunal’s decision in relation to the documents.
There are a number of background and other circumstances of understandable importance to both Ms Skyes and Mr Skyes which were raised in evidence which are not relevant to the issues before the Tribunal in relation to this application. This included Mr Skyes’ concern in relation to care that he had for two of the children in early 2022 which has not been recognised despite contacts with Child Support. The Tribunal has confined the evidence addressed in these Reasons to only the evidence relevant to the issues before the Tribunal in relation to this application.
ISSUES
15. The statutory provisions relevant to this review are contained in the Act.
16. A parent can apply to the Child Support Registrar for a determination to depart from the administrative assessment of child support (a process known as a change of assessment). Such an application is made under Part 6A of the Act. Pursuant to section 98C of the Act, a decision‑maker can make a change of assessment only if satisfied that:
(a)a ground for a change of assessment has been established;
(b)a change of assessment would be just and equitable as regards the children and each parent; and
(c)a change of assessment would be otherwise proper.
17. There are 10 possible grounds for a change of assessment set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words ‘in the special circumstances of the case’. The meaning of this expression is not defined in the Act but the Family Court in Gyselman v Gyselman (1992) FLC 92-279 (Gyselman) held that:
as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the formula in the ordinary run of cases.
18. The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) of the Act must be guided by that qualification.
19. If satisfied that a ground or grounds exist, and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.
20. It follows that the issues to be determined by the Tribunal are as follows:
(a)Does a ground exist to depart from the administrative assessment?
(b)Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support? and
(c)Would it be otherwise proper to make a particular departure determination?
CONSIDERATION
Issue 1 – Does a ground exist to depart from the administrative assessment?
21. The change of assessment application the subject of the Tribunal’s consideration is an application by Ms Skyes dated 9 May 2022 seeking a departure determination on the basis that there are extra costs of caring for, educating or training the children in the way both parties intended.
22. Subparagraph 117(2)(b)(ii) of the Act – commonly referred to as ‘Reason 3’ – provides as a ground for departure:
(b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents; …
23. The child support assessment in its usual form is intended to cover the costs of raising children which are common to all parents, for example, public school fees, camps, uniforms and extracurricular activities. It is not intended to cover additional expenses such as private school fees, which are not common. Where parents have a mutual expectation that a child is to be privately educated, an adjustment to the child support assessment may be required: Mee v Ferguson (1986) FLC 91–716 (Mee v Ferguson); Wild v Ballard (1997) FLC 92 771 (Wild v Ballard).
24. The principles that emerged from the consideration of the Full Court of the Family Court in Mee v Ferguson can be summarised as follows:
(a)where there has been a mutual expectation of the parents that the child attend a private school, that parent is ‘liable to contribute to the fees involved so long and to the extent that he or she has a reasonable financial capacity to continue to do so’; and
(b)where there has been no such expectation, a parent is not liable to contribute to those expenses unless there are reasons relating to the child’s welfare which dictate attendance at the school rather than a non-private school. Then the parent is required to contribute to the extent that he or she has a reasonable financial capacity to do so.
25. Although that case was decided prior to the Act, the reasoning has been applied to child support cases: Lightfoot v Hampson (1996) FLC 92 663 and Wild v Ballard.
26. What falls for consideration is: (1) whether there was an expectation by the parents that the child or children would attend private schooling; and (2) If so, the quantum of the school fees and whether the parents have the financial capacity to pay the associated fees.
Mr Skyes stated that he unknowingly signed a contract for [School 1] for [Child 2] that he thought was just for a scholarship and that he never otherwise agreed for [Child 2] to attend private school. As discussed with Mr Skyes at hearing, and as noted by the Child Support objections officer in their decision, the issue of whether there was an expectation by the parents that [Child 2] would attend private schooling, and in particular [School 1], has previously been determined in previous change of assessment decisions including on review of a previous change of assessment application by this Tribunal (differently constituted) in a decision dated 26 October 2021. Mr Skyes had review rights in relation to that decision. Mr Skyes told the Tribunal that he sought advice in relation to those rights and based on that advice did not pursue a review of that decision. However, he did not realise the decision would continue to impact future applications. As discussed with Mr Skyes, it is not the role of the Tribunal to provide advice and it is a matter for Mr Skyes whether he now pursues review of the 26 October 2021 decision, noting that any such application to the court now would require an extension of time within which to lodge an apply. Notably in the 26 October 2021 decision, the Tribunal found that:
… by signing the enrolment contract he (Mr Skyes) acknowledged that the school would enrol [Child 2] and that [Child 2] would thereafter be educated at the school. He acknowledged that the school would charge fees for [Child 2]’s attendance at the school, that it would determine from time to time. No reference whatsoever is made within the enrolment contract to a scholarship. Mr Skyes’ evidence to the Tribunal, to the effect that by signing the enrolment contract he was merely assisting in the process of providing [Child 2] an opportunity to be awarded a scholarship by the school and thereby enable Ms Skyes to realise her expectation of having [Child 2] in the school is simply implausible.
The Tribunal continued on to conclude that a ground for departure based upon Reason 3 existed.
On one view, Mr Skyes had a right to seek review of the 26 October 2021 decision and, having failed to do so, failing a review decision by the court to the contrary, the conclusion by the Tribunal as previously constituted that there was an expectation by Ms Skyes and Mr Skyes that [Child 2] would attend private schooling at [School 1] is conclusive. However, the Federal Magistrates Court decision of Gelber & Child Support Registrar & Anor (SSAT Appeal) [2012] FMCAfam 45 and the Federal Circuit Court of Australia decision of Tan & Tan (SSAT Appeal) and Tan v Child Support Registrar & Anor [2013] FCCA 123 concluded that findings of fact by a Tribunal making an administrative determination, as opposed to a court making a judicial determination, are not conclusive.
The Tribunal therefore considered afresh whether there was an expectation by the Mr Skyes and Ms Skyes that [Child 2] would attend private schooling, and in particular [School 1].
30. Mr Skyes confirmed at hearing that he agreed that he signed an enrolment contract for [Child 2] at [School 1], however he did not understand that he, in signing that document, agreed to or expected [Child 2] to be educated at that school; rather, he was simply supporting [Child 2] applying for a scholarship at the school.
31. Ms Skyes’ position remained that Mr Skyes signed and entered into the enrolment contract with [School 1] in respect of [Child 2] and that it was his expectation that she would be privately educated at that school.
32. In Oliver v Oliver [2021] FCCA 965, the father signed the enrolment form but did not make a commitment to pay school fees. On appeal the Federal Circuit of Australia agreed with the Tribunal’s approach that the father’s agreement to pay school fees was not a requirement for the ground to be established and that rather what is required is that:
(1) there are special circumstances in the case;
(2) the children are being educated in the manner expected by the parties; and
(3) the costs of maintaining the children are significantly affected as a consequence of that.
33. The legislation does not require an agreement to a child attending private schooling, or an agreement to paying the costs of that schooling. It is not in dispute that Mr Skyes and Ms Skyes signed an enrolment contract for [Child 2]’s attendance at [School 1]. In signing the enrolment contract, even if for the purpose of supporting a scholarship application, demonstrates an expectation of attendance at that school. In the Tribunal’s view, it is illogical to conclude that a parent did not expect a child’s education to occur at a school for which they have signed an enrolment contract, whether or not there was also an expectation of or application for a scholarship towards the costs of that education. The Tribunal therefore concludes that [Child 2] in attending [School 1] is ‘being educated in the manner expected by the parties’.
The Tribunal therefore then next considered the quantum of the school fees from 30 June 2022.
35. The evidence before Child Support in relation to [School 1] 2022 Fees (Exhibit 1, page 266) for Semester 2 for [Child 2] was as follows:
Tuition Fee $ 5,300.50
Resource Levy $ 1,035.00
Mobile Device Levy $ 275.00Sub-total $ 6,610.50
Less Fee Concession $ 2,650.00
Less [specified] Scholarship $ 2,595.00Total $ 1,365.50
Ms Skyes provided the Tribunal with an [School 1] 2023 Fee Estimate (Exhibit B, page 21) showing that fees were estimated at $5,147 calculated as follows:
Tuition Fee $11,582.00
Resource Levy $ 2,152.00
Mobile Device Levy $ 575.00
Camp Charge $ 2,100.00
P&F Subs $ 30.00Sub-total $16,439.00
Less Fee Concession $ 5,791.00
Less [specified] Scholarship $ 5,501.00Total $ 5,147.00
37. $1,365.50 for the 6 months from 30 June 2022 and $5,147 for the 12 months of 2023 are of a level that the costs of maintaining [Child 2] are significantly affected. The Tribunal is satisfied that the costs of [Child 2] attending [School 1] are greater than attending a government education facility and, in the context of the income of the parents (which will be explored in detail later in these Reasons), are expenses that are out of the ordinary. The Tribunal is satisfied that in the special circumstances of the case, the costs of educating [Child 2] in accordance with the mutual expectation of the parents are significantly affected because of private school fees at [School 1]. As a result, the Tribunal concludes that a ground for departure under subparagraph 117(2)(b)(ii) of the Act exists as regards [Child 2]. Consideration of the parents’ capacity to contribute to these costs and what is just and equitable in the circumstances will be considered later in these Reasons.
Ms Skyes also submitted that [Child 3] has expressed interest in the possibility of attending [School 1] for Year 7 starting in 2024, including because his other 2 siblings had had the opportunity to attend the college. As discussed with Ms Skyes, those costs have not yet been incurred and are not the subject of this application before the Tribunal. It is a matter for Ms Skyes if she lodges a further change of assessment application in relation to any such costs that are incurred in the future in respect of [Child 3]. It is not the role of the Tribunal to provide advice to either parent, however the Tribunal observes that the finding that there was a mutual expectation of private education relates to [Child 2] only and any change of assessment application in relation to private schooling for [Child 3] would, amongst other things, require consideration of whether there was a mutual expectation of private schooling for [Child 3].
Issue 2 – Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support?
39. The Tribunal has found that there is a ground to depart from the administrative assessment.
40. The Tribunal must also consider, pursuant to subsection 117(4) of the Act, whether it would be just and equitable to make a particular determination pursuant to sub‑subparagraph 98C(1)(b)(ii)(A) of the Act as follows:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c) the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i) himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g) any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order.
41. The Tribunal is not limited by the matters listed in subsection 117(4) of the Act and may consider any other relevant matters (subsection 117(9) of the Act).
42. The Full Family Court, in the case of Gyselman, stated that: ‘However, some of the matters listed in sub-section (4) may overlap with matters already considered under sub‑section [117](2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).’
43. The Tribunal does not propose to explore every matter in detail, but will discuss those it regards as pertinent in this application.
As regards paragraph 117(4)(a) of the Act, the Tribunal recognises that Mr Skyes and Ms Skyes have a duty to maintain the children. Further, the Tribunal notes the statements contained in sections 3 and 4 of the Act to the following effect:
(a)The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.
(b)The level of support should be determined in accordance with the costs of children, and according to the parents’ capacity to provide financial support.
45. Ms Skyes’ evidence was that her costs this year have included substantial costs for school camp fees for [Child 1] and [Child 3]. [Child 1] is currently in Grade 11 at [School 2], which includes a school camp [at location] at a cost of $1,200. [Child 3] is currently in Grade 6 at [School 3] and $414 is required for a school camp for him. The Tribunal recognises the significance of these costs in terms of maintaining the children. However, as discussed with Ms Skyes, camp fees at a state school are not out of the ordinary and are not unusual costs for any school-aged student. Other than the private school fees identified for [Child 2], there is otherwise no evidence that the costs of providing for the proper needs of the children are other than the usual costs of providing for children of their respective ages.
46. Ms Skyes’ evidence was that she is employed by [Employer 1] and she currently works 16 hours per week and takes up any opportunity that occasionally arises for extra work, such as taking up the offer recently of an extra day of work per week for a term that was offered to her, which she undertook even though after tax and adjustment to her Centrelink benefits, the extra day only amounted to an extra $50 per week for her.
Ms Skyes’ payslip from [Employer 1] for the period ending 7 May 2023 shows that she has year-to-date income as at that date of $26,968.75 which equates to approximately $31,650 per annum.[1] The Tribunal is satisfied that Ms Skyes’ available income from employment is reflected in her adjusted taxable income from time to time.
[1] $26,968.75 / 311 days x 365 days = $31,651.43
48. In her 20 December 2022 Statement of Financial Circumstances, Ms Skyes has estimated total average income of $583 per week and government benefits of $411.50 (family allowance) and $217.50 (jobseeker). Ms Skyes clarified that she also received child support but the amount she included in her Statement of Financial Circumstances of $440 was not a weekly amount but rather, as at December 2022, how much she had received since 25 October 2022. Ms Skyes checked her child support balance as at the date of hearing and noted that current child support arrears owing to her are $2,238.21.
Mr Skyes submitted that Ms Skyes’ expenses are overstated. Child support is based upon Ms Skyes’ adjusted taxable income rather than what she is actually expending. Nonetheless many of Ms Skyes’ expenses in her Statement of Financial Circumstances appeared higher than would be expected and the Tribunal discussed those expenses with Ms Skyes. Regarding the estimated water expense of $187 per week, Ms Skyes said that she has been continuing to investigate her high water expense. However, she clarified that her water bill is usually $500 to $600 per quarter which equates to approximately $46 per week rather than the $187 per week she has stated.
The Tribunal also observed that the estimated weekly expenses for gas, electricity, heating and telephone seemed high. Ms Skyes’ evidence was that her gas bill was approximately $315 per quarter (one gas bottle per month at $105 per bottle including a pension discount), her electricity has recently fluctuated between $113 and $193 per quarter and her telephone has recently dropped to approximately $155 per month after changing her plan. This approximates to expenses for gas of approximately $24 per week, average electricity of approximately $12 per week and telephone of approximately $36 per week rather than the stated expenses of $60, $50 and $52 per week respectively.
Ms Skyes’ evidence was that whilst she is renting, a condition of her tenancy is that she pay the associated council rates and levies, which amount to $58 per week.
As regards the children’s activities, hobbies and holiday expenses of $150, $80 and $97 per week, Ms Skyes stated that she just added up everything to arrive at those figures.
As regards the estimated education expense of $290 per week, the Tribunal notes that total school fees for [Child 2] (after concession and scholarship) are approximately $100 per week (currently being paid by Ms Skyes at the rate of $198 per fortnight to the school). As regards the other $190 per week, Ms Skyes said that she has a payment plan for [Child 1]’s camp and [Child 3]’s camp which is included in that amount, together with the other expenses for the children’s education.
Ms Skyes has no interest in real property, modest superannuation to which she has no current entitlement and minimal savings and personal belongings. Ms Skyes’ evidence was that her rent has increased from $300 per week to $400 per week since December 2022. Even utilising the lower estimated household expenditures discussed with Ms Skyes, her expenses significantly exceed her income and modest savings. When queried as to how she manages her expenses exceeding her income, Ms Skyes said she gets to the position where she has no money left for food for a few days and she has also had to borrow money off her oldest son (who is saving for a car). She said that she has also received assistance sometimes via the chaplain at the school.
The evidence before the Tribunal is that Mr Skyes has been working as a [Occupation 2]/ [Occupation 3] for many years (following bankruptcy previously in his own business). Mr Skyes said his current job is more like that of a [Occupation 2]. He is a [Occupation 3] by trade. [Employer 2] has been his employer for almost a year. He previously worked at [Employer 3]. The reason for his change of employment was that after many many years he could no longer manage night shifts and the current job is day shifts only. He works 32 hours per week usually although will take extra hours when he can get it, such as over the Christmas break when other employees are on holidays.
Payslips provided by Mr Skyes include a payslip for the week ended 7 May 2023 showing that Mr Skyes works 32 hours per week and has a year-to-date income as at that date of $41,675.30 which equates to approximately $48,900 per annum[2] consistent with his 2021/2022 adjusted taxable income of $48,809. The Tribunal is satisfied that Mr Skyes’ available income from employment is reflected in his adjusted taxable income from time to time.
[2] $41,675.30 / 311 days x 365 days = $48,911.53
In his 27 December 2022 Statement of Financial Circumstances, Mr Skyes has estimated total average income of $894 gross per week. This equates to $599.40 net income per week after tax of $145 and current child support deductions of $209.12 as can been seen from Mr Skyes’ payslips (Exhibit A, pages 9 to 11). Against this net income, Mr Skyes estimates his share of total household expenditure is $693 per week (in relation a household he shares with his partner and her 2 children). The components of Mr Skyes’ estimated weekly household expenditure are:
Food $ 70.00
Rent $ 300.00 (increased to $310 from 19 June 2023)
Household supplies $ 10.00
Electricity $ 10.00
Water $ 6.50
Telephone $ 20.00
Petrol $ 70.00
Maintenance $ 10.00
Registration $ 21.00
Clothing and shoes $ 2.00
Entertainment $ 3.00
Chemist $ 8.00
Gardening $ 4.00
Cleaning $ 2.00
Gifts $ 2.00Hairdressing $ 5.00
58. Mr Skyes’ evidence was that he no longer has the weekly chemist expense as he has not been able to afford to go to the doctor to get a repeat prescription for the medication at the chemist.
59. Mr Skyes has no interest in real property, modest superannuation to which he has no current entitlement and minimal savings and personal belongings.
Mr Skyes told the Tribunal that his finances are so limited that he has not been able to maintain his car or insure his car. However, his car is essential for him to be able to get to work. He lives approximately 30 kilometres from work. He owns a 2007 [vehicle model] and it recently broke down and had radiator problems. He could not afford the repair bill. His employer agreed to pay the bill ($1,139.75 as per the Tax Invoice at Exhibit A, page 14) for him and arranged for his (the employer’s) mechanic to repair the car and agreed that Mr Skyes could pay the bill back at $20 per week (as per his employer’s 15 May 2023 letter at Exhibit A, page 13). He has been paying the repair expense back at that rate but did have to miss a $20 weekly payment recently because he did not have enough money for fuel.
61. Ms Skyes submitted that Mr Skyes’ bank statements show that all of Mr Skyes’ transactions are now in cash, that is, after being paid he draws out money, and details of his transactions are therefore not shown in his bank statements. She submitted that in the previous year Mr Skyes’ bank account statements showed substantial discretionary spending on alcohol and gambling. Further, Ms Skyes said that the children had told her in the past of Mr Skyes expending money on alcohol and gambling. As discussed with Ms Skyes at hearing, the Tribunal would not in any event consider it in the best interests of anyone for children of a relationship to be put in a position of their statements being relied upon in relation to proceedings of this nature between their parents. Nonetheless the evidence is that Mr Skyes has had no care of the children since at least before 30 June 2022.
62. Mr Skyes’ evidence was that he lives from week to week and has no excess money to spend on discretionary spending including alcohol or gambling. He said that he did have some payout from a previous job in the COVID-19 period when he was experiencing depression. There is no evidence suggesting that Mr Skyes has any current or significant spending on any discretionary spending, including alcohol or gambling. His estimated expenses are modest and the Tribunal is satisfied that he has very limited if any excess capacity, as is demonstrated by his inability to have maintained his car and the recent necessity of his employer having to pay his car repair bill, repayable at $20 per week.
Given that the key issue for the Tribunal to consider is Mr Skyes’ capacity to contribute to [Child 2]’s private school fees, the Tribunal considered Mr Skyes’ expenditure in detail. Although more than the self-support amount utilised in the child support formula, Mr Skyes’ disclosed expenses are modest and plausible, with his estimated expenses exceeding his net income. Ms Skyes submitted that Mr Skyes’ share of the household rent expenditure should be less than 50% as his partner and both her children also live in the home. The Tribunal does not accept that submission. The Tribunal considers it reasonable for Mr Skyes and his partner to share that expense 50/50.
At issue in relation to whether there is a departure determination in relation to [Child 2]’s school fees is whether Mr Skyes has the capacity to contribute to the fees. In addition to the other considerations canvassed by the Tribunal, regard is also required to be had to the hardship that would be caused to either parent or the children. The Tribunal is satisfied that both Mr Skyes and Ms Skyes have limited income and means and that hardship would result for Mr Skyes if required to contribute to the school fees. However, the Tribunal is also satisfied that hardship would result for Ms Skyes if she did not receive a contribution to the school fees she is paying for [Child 2]. Notably, the school fees are already significantly reduced by [Child 2]’s scholarship and the concession the school allows for financial hardship (which is required to be applied for each year with no guarantee that it will be granted again and in lieu of which Ms Skyes’ evidence was that she is asked by the school to provide, and does, whatever volunteer assistance she can to the school). Further, and notably, the Tribunal notes that [Child 2] is now in her fourth year at the school and very attached to remaining at the school until the completion of her Year 12 studies, anticipated to be at the end of 2025. Ms Skyes’ evidence was that she had had a ‘hard’ discussion with [Child 2] about the possibility that she may have to discontinue at the school and [Child 2] has begged her to do whatever it takes for that not to happen. The Tribunal is satisfied based on this evidence and given [Child 2]’s age and stage of schooling that she will face hardship if she is not able to continue at her current school. Mr Skyes agreed that hardship would result for [Child 2] if she was not able to continue at her school but submitted that the reality is that he just does not have the capacity to contribute to school fees. He further noted that there should be equity for all three children. Ms Skyes submitted that both she and Mr Skyes agreed on the principle of equality for the children. She said that their oldest child, [Child 1], had had the opportunity and was at [School 1] for two years but was taken out of that school when he was living with Mr Skyes, and when he returned to her care 14 months later and asked to return to [School 1], she had to discuss with him the option of a public school. He applied for the sports academic program at [School 2] and was accepted and he has been and is happy there.
65. Notably, whilst important to the parents based on their evidence, equity between the children in the sense submitted by Mr Skyes is not a relevant issue for the Tribunal’s consideration.
66. The Tribunal is required to balance all matters, including the hardship that may ensue for each of Mr Skyes, Ms Skyes and the children, including [Child 2], should a departure determination be made, and if so, what the departure determination would be, as well as its impact.
In the absence of a departure determination based on the current recorded care position for the children (and until the completion of 2022/2023 tax returns by Mr Skyes and Ms Skyes which would mean new calculations would entail), the administrative assessment of child support based on Mr Skyes’ and Ms Skyes’ respective adjusted taxable incomes only would be as follows:
| Dates | Mr Skyes’ child support income | Ms Skyes’ child support income | Child Support Rate per annum payable by Mr Skyes | Net child support income for the period |
| 1 July 2022 to 30 September 2022[3] | $52,909 2020/2021 Adjusted taxable income | $41,945 2020/2021 Adjusted taxable income | $7,623.00 per annum $146.09 per week $20.87064 per day | $1,920.10 |
| 1 October 2022 to 31 December 2022[4] | $48,409 2021/2022 Adjusted taxable income | $48,409 2021/2022 Adjusted taxable income | $6,297 per annum $121.10 per week $17.24025 per day | $1,586.10 |
| 1 January 2023 to 31 December 2023 | $48,409 2021/2022 Adjusted taxable income | $37,131 2021/2022 Adjusted taxable income | $6,297 per annum $121.10 per week $17.24025 per day | $6,297.00 |
| Total | $9,803.20 |
[3] 92 days
[4] 92 days
68. The currently assessed child support liability based on Child Support’s original decision of 20 August 2022 (with the subsequent objection disallowed) is as follows:
| Dates | Mr Skyes’ child support income | Ms Skyes’ child support income | Child Support Rate per annum payable by Mr Skyes | Net child support income for the period |
| 1 July 2022 to 30 September 2022 | $52,909 2020/2021 Adjusted taxable income | $41,945 2020/2021 Adjusted taxable income | $7,623.00 per annum + $1,365 per annum + $8,988 per annum $172.25 per week $24.60780 per day | $2,263.92 |
| 1 October 2022 to 31 December 2022 | $48,409 2021/2022 Adjusted taxable income | $48,409 2021/2022 Adjusted taxable income | $6,297 per annum + $1,365 per annum = $7,662 per annum $147.35 per week $20.97741 per day | $1,929.92 |
| 1 January 2023 to 31 December 2023 | $48,409 2021/2022 Adjusted taxable income | $37,131 2021/2022 Adjusted taxable income | $6,297 per annum + $2,488 per annum = $8,785 per annum $168.94 per week $24.05202 per day | $8,785.00 |
| Total | $12,978.84 |
69. The difference between the administratively assessed child support liability and the current assessment is therefore $3,175.64 across an 18-month period, that is, $40.71[5] per week average extra liability based upon the current child support assessment. Whilst arguably a modest amount, it is a significant amount in the context of Mr Skyes’ income and capacity, and the evidence is that based on the assessment pursuant to Child Support’s current decision the child support arrears owing by Mr Skyes are $2,238.21. Mr Skyes’ evidence was (and the Child Support records show) that his 2021/2022 tax refund of $2,385.65 was garnisheed in relation to the then arrears and that he cannot afford for his 2022/2023 tax refund to similarly be utilised. He needs money to maintain his car, to pay his parents back money he owes to them ($500) and to clear his loan to his employer for his car repairs. Based upon Mr Skyes’ most recent payslip, it is not clear that Mr Skyes will have the benefit of any significant tax refund for the 2022/2023 tax year in any event. Against year-to-date income of $41,675.30 to 7 May 2023, Mr Skyes has only paid year-to-date tax of $3,555.04. Based upon those figures, Mr Skyes is likely to receive a tax refund significantly less for the 2022/2023 year than he did for the 2021/2022 year.
[5] $12,978.84 - $9,803.20 = $3,175.64 / 78 weeks
70. Mr Skyes’ evidence was that the current deduction from his pay is $209 per week on account of child support (and arrears) and that this was an automatically calculated deduction by Child Support. Given that the current liability is $168.94 per week, the additional $50 per week of the weekly automatic deduction is likely towards arrears. Ms Skyes’ evidence was that she can just about make things work receiving $209 per week, however if the child support payable goes back to $168.94 it is really pushing it for her.
71. The Tribunal is satisfied based on Mr Skyes’ income and limited capacity that he does not have capacity to contribute to 50% of [Child 2]’s net school fees. However, the Tribunal has to balance this position against the hardship issues canvassed, including the hardship that would result to [Child 2] if she was not able to complete her education at her current school. It is clear that Ms Skyes will do anything possible to enable [Child 2] to remain at her current school, including applying for a concession each year and doing whatever voluntary work she is able to do in recognition of that concession. However, there is a limit to what Ms Skyes is able to do to enable [Child 2] to stay at the school.
Having regard to all matters, and balancing the many competing factors, and in particular the hardship to Mr Skyes, Ms Skyes and [Child 2], the Tribunal has concluded that Mr Skyes does not have the capacity to contribute 50% of [Child 2]’s school fees. However, the Tribunal considers it just and equitable that Mr Skyes contribute something to the school fees to offset the hardship that would otherwise be occasioned to Ms Skyes and [Child 2] as canvassed. The Tribunal proposes that Mr Skyes’ child support liability be increased by $1,000 per annum. The Tribunal considers this balances any hardship to the parties and the children and would result in a child support liability as follows to 31 December 2023 based on current adjusted taxable incomes and the current care position:
| Dates | Mr Skyes’ child support income | Ms Skyes’ child support income | Child Support Rate per annum payable by Mr Skyes | Net child support income for the period |
| 1 July 2022 to 30 September 2022 | $52,909 2020/2021 Adjusted taxable income | $41,945 2020/2021 Adjusted taxable income | $7,623.00 per annum + $1,000 per annum + $8,623 per annum $165.83 per week $23.61 per day | $2,172.12 |
| 1 October 2022 to 31 December 2022 | $48,409 2021/2022 Adjusted taxable income | $48,409 2021/2022 Adjusted taxable income | $6,297 per annum + $1,000 per annum = $7,297 per annum $140.33 per week $19.97801 per day | $1,837.98 |
| 1 January 2023 to 31 December 2023 | $48,409 2021/2022 Adjusted taxable income | $37,131 2021/2022 Adjusted taxable income | $6,297 per annum + $1,000 per annum = $7,297 per annum $140.33 per week $19.97801 | $7,297.00 |
| Total | $11,307.10 |
73. The difference between the administratively assessed child support liability and this proposed departure would therefore be $1,503.90 across an 18-month period, that is, $19.28[6] per week average extra liability. This proposed departure would decrease the current arrears to approximately $1,270 and reduce the current ongoing weekly liability to $140. Mr Skyes is currently having $209 per week automatically deducted from his pay. An ongoing liability of $140 per week (subject to change depending on the parents’ future adjusted taxable incomes) is approximately $19 per week more than what would otherwise be the current administratively assessed child support weekly rate.
[6] $11,307.10 - $9,803.20 = $1,503.90 / 78 weeks
74. Having regard to all of the circumstances, having considered all competing matters and balancing the competing hardships, the Tribunal considers a departure determination increasing Mr Skyes’ child support liability by $1,000 per annum would be just and equitable.
75. As regards the duration of such a departure, Ms Skyes sought a departure until the contemplated end of [Child 2]’s Year 12 studies at the end of 2025. Mr Skyes in response maintained his submission that there should be no departure for any period.
76. For certainty, and to relieve the parents of the burden of continuing change of assessment applications and procedures, the Tribunal considers the proposed departure should continue until the end of 2025.
77. Having had regard to the relevant subsection 117(4) matters, the Tribunal is satisfied that this proposed departure is just and equitable.
Issue 3 – Would it be otherwise proper to make a particular departure determination?
78. The Tribunal considered whether it would be otherwise proper to make the proposed departure determination in accordance with sub‑subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) of the Act sets out the matters that must be considered when deciding whether it would be ‘otherwise proper’ to make a departure determination. Subsection 117(5) focuses on the balance of support between parents on the one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for a child may be affected by the level of child support.
79. Increasing the child support to be paid by Mr Skyes may decrease Ms Skyes’ entitlement to government payments and is, therefore, otherwise proper.
80. The Tribunal considers that it is otherwise proper to make the particular departure determination proposed.
DECISION
The decision under review is varied so that for the period 1 July 2022 to 31 December 2025, the annual rate of child suport payable by Mr Skyes is increased by $1,000.
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